STATEMENT OF INCOME AND EXPENDITURE ACCRUAL ACOUNTING Sales Cash - Starting Balance 1/1 STATEMENT OF FINANCIAL POSITION 500 Cash - Final Balance 31/12 Statement of Cash Flows Direct Method 729 Changes OPERATIONS (Current assets and debt) Net Income Statement of Cash Flows Indirect method $14 0 Cash received from 600 Decrease in accounts receivable 70 customers ? Decrease in accounts receivable ? less expenses: Cost of goods sold 110 Increase in Inventory 70 Cash paid to suppliers ? Increase in Inventory ? Increase in Accounts Payable 50 Increase in Accounts Payable ? Expense of uncollectible Increase in Provision for 10 accounts Uncollectibles 8 Increase in Provision for Uncollectibles ? Salary Expenditure 227 Decrease in Wages Payable 20 Cash paid by salary ? Decrease in Wages Payable ? Insurance Expense 12 Increase in Prepaid Insurance 6 Cash Paid for Insurance ? Increase in Prepaid Insurance ? Depreciation Expense 15 Accumulated Depreciation Increase 5 Depreciation Expense ? Interest Expense Tax Expenditure 9 Increase in interest to pay 2 Cash paid by Interest ? Increase in Interest to Pay ? 75 Decrease in Taxes Payable 10 Cash paid for taxes ? Decrease in Taxes Payable ? Loss from sale of 7 equipment Net Increase in Equipment 100 Loss from sale of equipment ? Go to Settings to activate Windows. Profit from Land Sale 5 Reduction in Land (no purchases) book value = 10, sold for - Book value 10 NET CASH FROM OPERATIONS Profit from Land Sale ? NET CASH FROM ? OPERATIONS ? Net income $140 ADDITIONAL INFORMATION AVAILABLE: INVESTMENT (Long-term assets, includes AFS C/P) INVESTMENT (Long-term assets, includes AFS C/P) Uncollectible accounts removed $2 ? ? ? ? Equipment with book value was sold 90 ? ? ? Cost of new equipment per 200 NET INVESTMENT CASH ? Issuance of a loan by 100 FINANCING (equity and long-term debt) NET INVESTMENT CASH FINANCING (equity and long-term debt) ? ? Issuance of Common Shares by 70 ? ? ? ? Buy shares in the portfolio by 20 ? ? ? ? ? ? ? ? NET FINANCING CASH ? NET FINANCING CASH ? INCREASE IN CASH ACCOUNT ? CHANGE IN CASH ACCOUNT ? 50 50 Add Initial Cash Balance of B/S 0 Add Initial Cash Balance 0 = Final Cash Balance of B/O ? = Final Cash Balance ? NOTE: Reconciliation of I/N with Op net cash Net Income Accounts that do NOT affect cash Depreciation Expense Expense of uncollectible accounts Profit per sale Loss per sale NOTE: $14 0 Cash paid in interest ? Cash paid by tax ? mmmm Activate Windows Go to Settings to activate Windows. NET FINANCING CASH INCREASE IN CASH ACCOUNT ? ? NET FINANCING CASH CHANGE IN CASH ACCOUNT ? ? 50 Add Initial Cash Balance of B/S 0 Add Initial Cash Balance = Final Cash Balance of B/O ? = Final Cash Balance ? 50 0 NOTE: Reconciliation of I/N with Op net cash NOTE: $14 Net Income 0 Cash paid in interest ? Cash paid by tax ? Nnaa aaaaaaan Accounts that do NOT affect cash NOTE: NOT including the decrease in uncollectible accounts eliminated Depreciation Expense Expense of uncollectible accounts Profit per sale Loss per sale Decrease in accounts receivable Increase in Inventory Increase in Accounts Payable Decrease in Wages Payable Increase in Prepaid Insurance Increase in interest to pay Decrease in Taxes Payable